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xiiThe Bastiat Collectionhis amazing publishing career when an article on the effects ofprotectionism on the French and English people was published inthe Journal des Economistes which was held to critical acclaim.1The bulk of his remarkable writing career that so inspired theearly generation of English translators—and so many more—iscontained in this collection.If we were to take the greatest economists from all ages andjudge them on the basis of their theoretical rigor, their influenceon economic education, and their impact in support of the freemarket economy, then Frédéric Bastiat would be at the top of thelist. As Murray N. Rothbard noted:Bastiat was indeed a lucid and superb writer, whose brilliantand witty essays and fables to this day are remarkable anddevastating demolitions of protectionism and of all forms ofgovernment subsidy and control. He was a truly scintillatingadvocate of an untrammeled free market.2This book brings together his greatest works and representsthe early generation of English translations. These translatorswere like Bastiat himself, people from the private sector who hada love of knowledge and truth and who altered their careers tovigorously pursue intellectual ventures, scholarly publishing, andadvocacy of free trade.This collection represents some of the best economics everwritten. He was the first, and one of the very few, to be able toconvincingly communicate the basic propositions of economics.The vast majority of people who have learned anything about economics have relied on Bastiat or publications that were influenced1For biographical material on Bastiat see George Roche’s Frédéric Bas-tiat: A Man Alone (New Rochelle, N.Y.: Arlington House, 1971) and DeanRussell’s Frédéric Bastiat: Ideas and Influences (Irvington-on-Hudson, N.Y.:Foundation for Economic Education, 1969).2Murray N. Rothbard, Classical Economics: An Austrian Perspective onthe History of Economic Thought, vol. II (1995; Auburn, Ala.: Ludwig vonMises Institute, 2006), p. 444.

Introductionxiiiby his work. This collection—possibly more than anything everwritten about economics—is the antidote for economic illiteracyregarding such things as the inadvisability of tariffs and price controls, and everyone from the novice to the Ph.D. economist willbenefit from reading it.The collection consists of three sections, the first of whichcontains his best-known essays. In “That Which is Seen, and ThatWhich is Not Seen,” Bastiat equips the reader to become an economist in the first paragraph and then presents the story of the broken window where a hoodlum is thought to create jobs and prosperity by breaking windows. Bastiat solves the quandary ofprosperity via destruction by noting that while the apparent prosperity is seen, what is unseen is that which would have been produced had the windows not been broken. According to Rothbard:In this way, the “economist,” Bastiat’s third-level observer,vindicates common sense and refutes the apologia fordestruction of the pseudo-sophisticate. He considers what isnot seen as well as what is seen. Bastiat, the economist, isthe truly sophisticated analyst.3Professor Jörg Guido Hülsmann credits Bastiat for discovering this counterfactual method, which allowed Bastiat to showthat destruction (and a variety of government policies) is actuallythe path to poverty, not prosperity. This lesson is then applied toa variety of more complex cases and readers will never be able todeny that scarcity exists and will always—hopefully—rememberthat every policy has an opportunity cost. If nothing else, they willnot believe—as is often claimed—that earthquakes, hurricanes,and wars lead to prosperity. The remaining essays cover the important institutions of society—law, government, money, and capital—where Bastiat explains the nature of these institutions and3Ibid., p. 445.

xivThe Bastiat Collectiondisabuses the reader of all the common misconceptions regardingthem.The second section is Bastiat’s Economic Sophisms, a collection of 35 articles on the errors of protectionism broadly conceived. Here Bastiat shows his mastery of the methods of argumentation—using basic logic and taking arguments to their logicalextreme—to demonstrate and ridicule them as obvious fallacies. Inhis “Negative Railroad” Bastiat argues that if an artificial break ina railroad causes prosperity by creating jobs for boatmen, porters,and hotel owners, then there should be not one break, but many,and indeed the railroad should be just a series of breaks—a negative railroad. In his article “An Immense Discovery!” he asks,would it not be easier and faster simply to lower the tariffbetween points A and B rather than building a new railroad totransport products at a lower cost? His “Petition of the Candlemakers” argues in jest that a law should be passed to require thatall doors and windows be closed and covered during the day toprevent the sun from unfairly competing with the makers of candles and that if such a law were passed it would create high-paying jobs in candle and candlestick making, oil lamps, whale oil,etc. and that practically everyone would profit as a result.The third section is Bastiat’s Economic Harmonies which washastily written before his death in 1850 and is considered incomplete. Here he demonstrates that the interests of everyone in society are in harmony to the extent that property rights arerespected. Because there are no inherent conflicts in the market,government intervention is unnecessary. The borrower wantslenders to thrive so that loans will be available and the lenderwants borrowers to thrive in order to collect interest on savingsand to be paid back the loan principal. This book is the basis ofcharges that critics have levied against Bastiat, claiming that hemade theoretical errors and failed to extend the corpus of theory.I have shown elsewhere that these criticisms must represent a misreading of Bastiat, and Rothbard showed that Bastiat made thevital contribution of returning economics to a focus on wants,

Introductionxvexchange, and consumption correcting the errors of British political economy.4In a more recent and very important reappraisal of Bastiat,Professor Hülsmann has shown my suspicions to be correct.5 Hedemonstrates that Bastiat’s Harmonies is an important theoreticalinnovation that was widely dismissed by interventionists andattacked by equilibrium theorists. Interventionists dismissed itbecause the analysis proves that society can thrive without anygovernment intervention in the economy. Equilibrium theoristssaw Bastiat’s conception of harmony as competition for their ownconcept of equilibrium—and rightly so—because while equilibrium is at best a useful fiction, harmony is an accurate conceptionof what actually exists in a free-market world. Therefore, theequilibrium approach can in some cases mimic or equal harmony,but it can also be applied to misleading ends and is inapplicablefor others. Hülsmann also brilliantly shows how critics have misread and therefore misunderstood Bastiat’s concept of value andservice and that their criticisms are invalid. The Hülsmann reappraisal smashes the critics and their echoes and is therefore animportant primer for this section. Also see the important articleby Joseph T. Salerno who shows that the marginalization of Bastiat and the French school involved a long process of deliberatedistortion by their doctrinal enemies among the Anglo-Americaneconomists.6Patrick James Stirling translated Bastiat’s Economic Harmonies (1860) and Economic Sophisms (1863) which are reproduced in this collection. Stirling was a student of ThomasChalmers, an important Scottish economist of the first half of the4Mark Thornton, “Frédéric Bastiat was an Austrian Economist,” Journal des Economistes et des Etudes Humaines 11, no. 2/3 (June/September2001): 387–98.5Jörg Guido Hülsmann, “Bastiat’s Legacy in Economics,” QuarterlyJournal of Austrian Economics 4, no. 4 (Winter 2000) pp. 55–70.6Joseph T. Salerno, “The Neglect of Bastiat’s School by English-Speaking Economists: A Puzzle Resolved,” Journal des Économistes et des EtudesHumaines 11, no. 2/3 (June/September 2001), pp. 451–95.

xviThe Bastiat Collectionnineteenth century and leader of the Free Kirk schism from theChurch of Scotland. Stirling was the author of The Philosophy ofTrade, in which he provided a theory of prices and profits andexamined the principles that determine the relative value ofgoods, labor, and money.7 In The Australian and Californian GoldDiscoveries and their Probable Consequences he examined theimpact of the large nineteenth-century gold discoveries and thelaws that determined the value and distribution of money andwhere he exhibited a proto-Austrian theory of the business cycle.8Stirling has recently resurfaced in the economics literature as theauthor of the oldest known undergraduate essay in economics.9We remain uncertain regarding the early translations of the essaysin the first section of this volume (many translations of this periodwere unsigned), but what we do know seems to reinforce theScottish connection to Bastiat. William Ballantyne Hodgson, whoheld a Chair in Political Economy at the University of Edinburgh,translated the essays from “Things Seen and Things Not Seen” forpublication in newspapers and were later published as a booklet10and Economic Sophisms was first translated by Mrs. LouisaMcCord (a Scottish surname) from Charleston, South Carolina.117Patrick James Stirling, The Philosophy of Trade (Edinburgh: Oliver &Boyd, 1846); or outlines of a theory of profits and prices, including anexamination of the principles which determine the relative value of corn,labor, and currency.8The Australian and Californian Gold Discoveries and Their ProbableConsequences: An Inquiry Into The Laws which Determine the Value andDistribution of the Precious Metals with Historical Notices of the Effects ofthe American Mines on European Prices in the Sixteenth, Seventeenth andEighteenth Centuries (Oliver and Boyd, 1853).9A.M.C. Waterman, “The Oldest Extant Undergraduate Essay in Economics?” Journal of the History of Economic Thought 27, no. 4 (December2005): 359–73.10William Ballantyne Hodgson, “Things Seen and Things Not Seen”(London: Cassel & Company Limited, 1910), abridged from the translationby Dr. Hodgson in 1852.11Louisa S. McCord, Sophisms of the Protective Policy (New York:Wiley and Putnam, 1848). McCord wrote widely on economics and politics

IntroductionxviiThe first section is based on the David Wells (also a Scottish surname) edition of the essays which contained the long out-of-printessay, “What is Money?”12This collection of early translations is dedicated to improvingeconomic literacy and eliminating the frustration of economicteachers everywhere. No one is better to do so, and in such aforceful and entertaining way, than Bastiat. Enjoy.Mark ThorntonMay 2007anonymously because her contemporaries would consider it inappropriatefor a woman to be writing on such controversial matters.12David A. Wells, Essays on Political Economy (New York: G.P. Putnam’s Sons, 1877). Wells was a successful writer, publisher, and inventor.He opposed the income tax and supported free trade and the gold standard.He was appointed chairman of the national revenue commission after theCivil War and is said to have placed the U.S. on a scientific revenue system.

I.ANDTHAT WHICH IS SEEN,THAT WHICH IS NOT SEEN1In the economy, an act, a habit, an institution, a law, gives birthnot only to an effect, but to a series of effects. Of these effects,the first only is immediate; it manifests itself simultaneouslywith its cause—it is seen. The others unfold in succession—theyare not seen: it is well for us if they are foreseen. Between a goodand a bad economist this constitutes the whole difference—theone takes account of the visible effect; the other takes accountboth of the effects which are seen and also of those which it isnecessary to foresee. Now this difference is enormous, for italmost always happens that when the immediate consequence isfavorable, the ultimate consequences are fatal, and the converse.Hence it follows that the bad economist pursues a small presentgood, which will be followed by a great evil to come, while thetrue economist pursues a great good to come, at the risk of a smallpresent evil.1First published in 1850.1

2The Bastiat CollectionIn fact, it is the same in the science of health, arts, and in thatof morals. It often happens, that the sweeter the first fruit of ahabit is, the more bitter are the consequences. Take, for example,debauchery, idleness, prodigality. When, therefore, a man,absorbed in the effect which is seen, has not yet learned to discernthose which are not seen, he gives way to fatal habits, not only byinclination, but by calculation.This explains the fatally grievous condition of mankind. Ignorance surrounds its cradle: then its actions are determined bytheir first consequences, the only ones which, in its first stage, itcan see. It is only in the long run that it learns to take account ofthe others. It has to learn this lesson from two very different masters—experience and foresight. Experience teaches effectually,but brutally. It makes us acquainted with all the effects of anaction, by causing us to feel them; and we cannot fail to finish byknowing that fire burns, if we have burned ourselves. For thisrough teacher, I should like, if possible, to substitute a more gentle one. I mean Foresight. For this purpose I shall examine theconsequences of certain economical phenomena, by placing inopposition to each other those which are seen, and those whichare not seen.1. THE BROKEN WINDOWHave you ever witnessed the anger of the good shopkeeper,John Q. Citizen, when his careless son happened to break a paneof glass? If you have been present at such a scene, you will mostassuredly bear witness to the fact, that every one of the spectators,were there even 30 of them, by common consent apparently,offered the unfortunate owner this invariable consolation: “It isan ill wind that blows nobody good. Everybody must live, andwhat would become of the glaziers if panes of glass were neverbroken?”Now, this form of condolence contains an entire theory,which it will be well to show up in this simple case, seeing that itis precisely the same as that which, unhappily, regulates the

That Which Is Seen, and That Which Is Not Seen3greater part of our economical institutions. Suppose it cost sixfrancs to repair the damage, and you say that the accident bringssix francs to the glazier’s trade—that it encourages that trade tothe amount of six francs—I grant it; I have not a word to sayagainst it; you reason justly. The glazier comes, performs his task,receives his six francs, rubs his hands, and, in his heart, blesses thecareless child. All this is that which is seen.But if, on the other hand, you come to the conclusion, as istoo often the case, that it is a good thing to break windows, thatit causes money to circulate, and that the encouragement ofindustry in general will be the result of it, you will oblige me tocall out, “Stop there! Your theory is confined to that which isseen; it takes no account of that which is not seen.”It is not seen that as our shopkeeper has spent six francs uponone thing, he cannot spend them upon another. It is not seen thatif he had not had a window to replace, he would, perhaps, havereplaced his old shoes, or added another book to his library. Inshort, he would have employed his six francs in some way whichthis accident has prevented.Let us take a view of industry in general, as affected by thiscircumstance. The window being broken, the glazier’s trade isencouraged to the amount of six francs: this is that which is seen.If the window had not been broken, the shoemaker’s trade (orsome other) would have been encouraged to the amount of sixfrancs: this is that which is not seen.And if that which is not seen is taken into consideration,because it is a negative fact, as well as that which is seen, becauseit is a positive fact, it will be understood that neither industry ingeneral, nor the sum total of national labor, is affected, whetherwindows are broken or not.Now let us consider John Q. Citizen himself. In the formersupposition, that of the window being broken, he spends sixfrancs, and has neither more nor less than he had before, theenjoyment of a window. In the second, where we suppose thewindow not to have been broken, he would have spent six francsin shoes, and would have had at the same time the enjoyment of

4The Bastiat Collectiona pair of shoes and of a window. Now, as John Q. Citizen formsa part of society, we must come to the conclusion that, taking itall together, and making an estimate of its enjoyments and itslabors, it has lost the value of the broken window.Whence we arrive at this unexpected conclusion: “Societyloses the value of things which are uselessly destroyed;” and wemust assent to a maxim which will make the hair of protectionists stand on end—To break, to spoil, to waste, is not to encourage national labor; or, more briefly, “destruction is not profit.”What will you say, Moniteur Industriel? what will you say, disciples of good M.F. Chamans, who has calculated with so muchprecision how much trade would gain by the burning of Paris,from the number of houses it would be necessary to rebuild?I am sorry to disturb these ingenious calculations, as far astheir spirit has been introduced into our legislation; but I beg himto begin them again, by taking into the account that which is notseen, and placing it alongside of that which is seen.The reader must take care to remember that there are not twopersons only, but three concerned in the little scene which I havesubmitted to his attention. One of them, John Q. Citizen, represents the consumer, reduced, by an act of destruction, to oneenjoyment instead of two. Another, under the title of the glazier,shows us the producer, whose trade is encouraged by the accident. The third is the shoemaker (or some other tradesman),whose labor suffers proportionally by the same cause. It is thisthird person who is always kept in the shade, and who, personifying that which is not seen, is a necessary element of the problem. It is he who shows us how absurd it is to think we see a profitin an act of destruction. It is he who will soon teach us that it isnot less absurd to see a profit in a restriction, which is, after all,nothing else than a partial destruction. Therefore, if you will onlygo to the root of all the arguments which are adduced in its favor,all you will find will be the paraphrase of this naive question—What would become of the glaziers, if nobody ever broke windows?

That Which Is Seen, and That Which Is Not Seen2. THE DISBANDINGOF5TROOPSIt is the same with a people as it is with a man. If it wishes togive itself some gratification, it naturally considers whether it isworth what it costs. To a nation, security is the greatest of advantages. If, in order to obtain it, it is necessary to have an army of ahundred thousand men, I have nothing to say against it. It is anenjoyment bought by a sacrifice. Let me not be misunderstoodupon the extent of my position. A member of the assembly proposes to disband a hundred thousand men, for the sake of relieving the tax-payers of a hundred million.If we confine ourselves to this answer, “The hundred thousand men, and these hundred million of money, are indispensableto the national security: it is a sacrifice; but without this sacrifice,France would be torn by factions or invaded by some foreignpower”—I have nothing to object to this argument, which may betrue or false in fact, but which theoretically contains nothingwhich militates against economics. The error begins when the sacrifice itself is

The second section is Bastiat's Economic Sophisms, a collec-tion of 35 articles on the errors of protectionism broadly con-ceived. Here Bastiat shows his mastery of the methods of argu-mentation—using basic logic and taking arguments to their logical extreme—to demonstrate and ridicule them as obvious fallacies. In